CBO: Senate bill $1 trillion over 10 years

Medicare principally covers seniors, while Medicaid is a state-federal health care program for the poor.

Other officials, speaking on condition of anonymity, described contacts between aides to Sen. Max Baucus, D-Mont., chairman of the Finance panel, and the pharmaceutical industry.

Ken Johnson, senior vice president of PhRMA, declined to provide any details. "Improving and expanding patient care a remains our top priority but we have a big concern about how far we can go in helping to enact health care reform without jeopardizing innovation," he said.

Similarly, Finance Committee aides have held similar discussions with other groups keenly interested in the health care issue, including hospitals, health insurance companies and physicians, according to several officials.

The CBO letter was the first from the independent agency on any of the major bills circulating in Congress.

Kennedy, chairman of the Senate Health, Education, Labor and Pensions Committee, is one of the driving forces in Congress behind health care overhaul, even though he remains away from the Capitol battling brain cancer.

A spokesman, Anthony Coley, said: "As the CBO letter indicates, this is an incomplete statement of an incomplete bill. We look forward to a complete CBO estimate of a complete bill."

The CBO letter predicted that many Americans would gain coverage if Kennedy's legislation were implemented, while others would lose it.

"Once the proposal was fully implemented, about 39 million individuals would obtain coverage through the new insurance exchanges. At the same time, the number of people who had coverage through an employer would decline by about 15 million ... and coverage from other sources would fall by about 8 million," it said.

"The net decrease in the number of people uninsured would be about 16 million," Elmendorf wrote.